Saudi Arabia names veteran prince as energy minister

DUBAI (Reuters) - Saudi Arabia’s king appointed his son, Prince Abdulaziz bin Salman, as energy minister on Sunday, replacing Khalid al-Falih and for the first time handing the portfolio in the world’s top oil exporter to a member of the royal family.

Prince Abdulaziz, a longstanding member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), has decades of experience in the oil sector and is not expected to change the kingdom’s oil and OPEC policies, Saudi officials and analysts say.

He helped to negotiate the current agreement between OPEC and non-OPEC countries, a group known as OPEC+, to cut global crude supply to support prices and balance the market.

“Saudi oil policy will be enhanced by the appointment of Prince Abdulaziz, through strengthening cooperation among OPEC and with non-OPEC,” a Saudi official told Reuters.

Saudi Arabia has cut its oil output by more than the agreed target under the OPEC+ supply pact to support oil prices needed to achieve a high valuation of state oil giant Aramco ahead of a planned listing in 2020-21.

“He (Prince Abdulaziz) is an incredibly capable technocrat, who is steeped in the energy industry,” said Helima Croft, managing director of RBC Capital Markets.

“I do not think there will be any major shifts coming on OPEC policy or broader initiatives.”

The prince, 59, is an older half-brother of powerful Crown Prince Mohammed bin Salman. He was named minister of state for energy affairs in 2017 and worked closely with previous oil minister Ali al-Naimi for years as his deputy.

Some industry insiders say his lengthy experience has helped to overcome an unwritten rule against appointing a royal to run the oil portfolio in Saudi Arabia.

DELICATE BALANCE

Conventional wisdom has held that giving it to a prince could upset the Al Saud dynasty’s delicate balance of power and risk making oil policy hostage to princely politicking, Saudi sources and diplomats say.

Prince Abdulaziz’s appointment as energy minister was announced in a royal decree published by state news agency SPA.

Saudi Arabia has had five oil ministers since 1960, none of which has been a royal.

Last month, Riyadh created a ministry for industry and mineral resources, separating it from the kingdom’s colossal energy ministry. Previously, Falih had overseen more than half the Saudi economy through the super-ministry created in 2016 to help manage new reforms.

But for all the ambitious plans for industry and mining, there has been relatively little development, with Falih blamed by some for the lack of foreign investments, sources close to the matter said.

Last week Falih was also removed from his post as chairman of Aramco to be replaced by Yasser al-Rumayyan, who heads sovereign wealth fund PIF.

The appointment of Rumayyan indicates that Riyadh might be moving quicker than expected with Aramco’s initial public offering (IPO). Falih was privately opposed to the IPO and has lobbied against the listing, fearing he would have to step down as chairman of the company, sources close to the matter told Reuters.

“Falih was against the IPO ... He knew Aramco inside out, but he did not want to lose power and he killed many investment projects,” said one source familiar with Saudi thinking.

Additional reporting by Samar Ahmed in Cairo and Stephen Kalin in Dubai; Editing by Ros Russell and David Goodman